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lite.cnn.com - on gopher - inofficial
ARTICLE VIEW:
Trump got another trade deal. This one could cost you
Analysis by Elisabeth Buchwald, CNN
Updated:
7:00 AM EDT, Thu July 3, 2025
Source: CNN
Shoes, electronics and clothing are just some of the goods that could
get more expensive under the President Donald Trump announced with
Vietnam on Wednesday.
Wait — how’s that possible?
For the past three months, goods shipped from Vietnam to the United
States were tariffed at a minimum 10% rate, a reprieve from the 46%
rate that briefly went into effect in April before Trump announced a
pause.
Trump claimed the delay would give countries more time to negotiate
trade deals with the US. As his self-imposed July 9 deadline for deals
approaches with few new agreements in place, Trump has threatened to
raise tariffs again.
But here’s the kicker: Sealing a deal, or a framework for one,
doesn’t prevent higher import taxes, either.
The agreement Trump announced via social media calls for a minimum 20%
tariff on Vietnamese goods exported to the US. That’s double the rate
US businesses are currently paying. In return, Trump said that Vietnam
agreed to open its economy to trade with the US, including not
tariffing American goods.
Many details remain unknown, including whether anything has been
finalized. Vietnam’s state-run news outlet, Việt Nam News, referred
to the agreement on Wednesday as “a framework.”
“Obviously this is not good news for American consumers,” said
Clark Packard, a trade policy research fellow at the
libertarian-leaning Cato Institute. Vietnam is the sixth-top source of
foreign goods shipped to the US, a ranking that’s steadily risen over
the past few years as shipments from China to the US have declined.
Among the top goods the US buys from Vietnam are electronics, apparel,
footwear and furniture, according to US Commerce Department data.
That makes it all the more likely Americans will be impacted by the
higher tariff rates. “Certainly American consumers will ultimately
bear the burden here,” Packard told CNN.
Tariffs are taxes on imported goods, making them more expensive to buy.
Businesses foot the initial tariff bill for imported goods, but they
often pass on some of those costs to consumers by raising prices.
But many businesses will absorb some or all of those tariff costs to
avoid losing customers. And businesses often stockpile inventory ahead
of tariffs, delaying cost increases for themselves and for customers.
Eventually, though, they may run out of options to protect consumers
from higher prices.
“The Administration has consistently maintained that the cost of
tariffs will be borne by foreign exporters who rely on the American
economy, the biggest and best consumer market in the world,” White
House spokesman Kush Desai said in a statement to CNN. Desai said
recent inflation readings, which have yet to show widespread price
increases even as tariffs on virtually everything the US imports have
increased since April, are proof of that.
Trump’s tariffs are intended to “level the playing field for
American industries and workers,” Desai said. In other words, by
raising the cost of foreign-made goods, Trump hopes to induce more
businesses to produce goods domestically.
However, it can take several years for businesses to onshore
manufacturing. In the meantime, they may be stuck importing products
from places like Vietnam.
Caleb Petitt, a research associate at the Independent Institute, a
libertarian-leaning think tank, disputed the idea that American
businesses will benefit from the tariffs because many rely on
components produced abroad, as well as billions of dollars worth of
finished goods.
“These tariffs will not help American industry and will burden
American consumers with higher costs and uncertainty about the
market,” he said.
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